Nordson Corporation reported results for the third quarter of fiscal year 2016.
For the quarter ending July 31, 2016, sales were $490 million, a 6 percent increase from the prior year’s third quarter. This change in sales includes a 4 percent increase in organic volume, a 2 percent increase related to the first year effect of acquisitions, and less than 1 percent negative impact related to the unfavorable effects of currency translation.
Operating profit was $124 million, net income was $84 million, and diluted earnings per share were $1.46. Prior year third quarter sales, operating profit, net income and diluted earnings per share were $463 million, $103 million, $69 million and $1.14, respectively.
“Nordson delivered record revenue and profitability in the third quarter as our global team continued meeting customer needs across our diverse end markets and driving efficiency throughout our operations,” said Michael F. Hilton, Nordson President and Chief Executive Officer.
“We generated very solid organic growth of 4 percent in the quarter compared to a period of robust growth a year ago, outperforming the continuing low-growth global macroeconomic environment.
Operating margin in the quarter was 25 percent, a three percentage point improvement compared to the previous year’s third quarter, with incremental operating margin in the quarter of 77 percent and earnings per share growth of 28 percent, both over the prior year third quarter. Shortly after the end of the quarter, Nordson’s Board of Directors increased our dividend by 13 percent, marking the 53rd consecutive year Nordson has raised its annual dividend.”
Third Quarter Segment Results
Adhesive Dispensing Systems organic sales volume increased 4 percent compared to the prior year’s third quarter, with additional volume growth of 1 percent related to the first year effect of the WAFO acquisition. “Strength in consumer non-durable and general product assembly markets in the current quarter helped drive excellent organic growth in this segment for the fifth straight quarter,” said Hilton.
Geographically, Europe and the U.S. led the growth. Reported operating margin in the segment was 27 percent in the quarter, or 28 percent on a normalized basis to exclude non-recurring charges related to restructuring initiatives.
Advanced Technology Systems organic sales volume increased 6 percent compared to the prior year’s third quarter, with additional volume growth of 5 percent related to the first year effect of the Liquidyn and MatriX acquisitions. “We generated robust organic growth in the third quarter compared to the prior year based on strong demand for automated and semi-automated dispense equipment in electronic end markets and fluid management components for medical end markets,” said Hilton.
Geographically, Japan, Asia Pacific and the United States led the growth. Volume leverage, product mix and continuous improvement initiatives helped drive reported segment operating margin to 31 percent, an increase of seven percentage points compared to the same quarter a year ago.
Industrial Coating Systems sales volume decreased 3 percent from the prior year’s third quarter. “Sales were impacted by very challenging comparisons to the prior year, where total segment volume was up 23 percent at this time a year ago,” said Hilton.
“Strength in powder and liquid coating product lines during the current quarter was offset by softness in other product lines. Growth in Europe and the United States was offset by other geographies.” Reported operating margin was 17 percent in the quarter, or 18 percent on a normalized basis to exclude non-recurring charges related to restructuring initiatives.
